Getting late payments under control

Posted 16 Jan

Getting late payments under control

When customers fail to pay on time, that’s not just an issue for your aged debtor report.  Slow payment has a knock-on effect on your cashflow, which in turn can affect the working capital you have available in the business. Taking steps to speed up late payments is vital.

Here are some fundamental ways to improve payments times:

1. Implement Electronic Invoicing: Switch to electronic invoicing and send bills directly to your client’s accounting software. This reduces manual errors and speeds up approvals.

2. Offer multiple payment methods: Offer the most convenient ways for customers. This may include having credit cards, BPAY , direct debits and digital wallets as payment methods.

3. Automate payment reminders: Use your accounting software to automatically send polite emails or SMS reminders to customers, both before and after the invoice due date.

4. Monitor your aged debtors weekly: Regularly review your aged receivables report to spot any overdue accounts early and make follow-up calls to chase for payment.

5. Ask for deposits upfront: For larger amounts, secure a percentage of the total fee before work begins. This helps you cover costs and ensures you’re not out of pocket.

If late payments are damaging your cashflow position, come and have a friendly chat with the team here at WDF Accounting & Advisory who can help you understand steps you can take to improve your payment collection.

WDF Accounting and Advisory | Accountants Wagga | Your partners in business

Providing carefully tailored accounting solutions in business advisory, tax compliance, bookkeeping, Self-Managed Super funds, and more.